All posts tagged Jürgen Fitschen

Over at Dow Jones Banking Intelligence, Joe Ortiz has been taking a look at Deutsche Bank’s woes. Here’s a taster of his article, the full version of which can be read at DJBI, a subscription only service.Click here to subscribe.

This week, you can just imagine Deutsche Bank’s CFO Stefan Krause turning to co-CEO Jürgen Fitschen and lamenting, “Unglück kommt selten allein.” It never rains but it pours.

Already regarded as being among the weakest of Europe’s major banks when it comes to capital, Deutsche on Thursday warned that expectations of a fourth quarter net profit of between €500 million to €600 million would be affected by a “significant negative impact” following a review of impaired assets, which could lead to a loss.

Mr. Krause declined to be more specific and the bank in a statement said the review was still “ongoing.”

That means the bank’s strong investment banking franchise is running very fast for the whole group to stand still at best. It also implies that in order to maintain its first quarter 2013 Basel III core Tier 1 capital ratio target of 8%, something else will have to give. Credit Suisse says it expects €250 million of deleveraging costs and €280 million of restructuring costs in Q4, leading to a pretax loss of €448 million.

All else being equal, Deutsche might not have too much trouble improving its capital ratios, which are fundamental for market confidence. But the trouble with Deutsche is that all else is very far from equal. In fact, the past week has been a disaster, and the market has slashed 5.6% off its shares in the last two days.